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On a visit to the US industrial heartland on Tuesday, Donald Trump announced further steps back from his trade war, offering tariff relief to some of the world’s largest carmakers. He has removed heavy duties for these manufacturers and offered rebates to those producing vehicles in the US to offset levy costs. Importers of parts will also be exempt from tariffs on steel and aluminum.
“We just wanted to help them enjoy this little transition, short-term,” Trump stated to reporters outside the White House before his trip. “If they can’t get parts, we didn’t want to penalize them.”
The president formalized these measures through an executive order signed before visiting Michigan, a key US auto manufacturing center, marking his 100th day in office.
This relief measure comes just four days before a planned 25 percent tariff was to be imposed on imported car parts. A separate 25 percent tariff on foreign-made cars was already applied, with some exemptions for Mexico and Canada.
A senior commerce department official explained that the changes to Trump’s car tariffs are intended to support domestic auto manufacturers’ growth plans, employment, and factory expansion in America.
The Financial Times had earlier reported on Trump’s new car tariff relief plan. The trade war has raised concerns in the car industry about increased production costs in the US.
Despite simplifications in the tariff regime for car parts through Trump’s executive order, manufacturers remain subject to a 20 percent tariff on imports from China. Parts from Mexico and Canada adhering to the USMCA trade agreement will stay tariff-free, while non-compliant vehicles face a maximum tariff of 25 percent.
The executive order’s tariff rebate allows US-based car assembly to recover up to 3.75 percent of its value for the next year, decreasing to 2.5 percent from May 1, 2026, and phasing out entirely by April 30, 2027.
The easing of tariffs follows industry lobbying to reduce costs and policy uncertainties. Manufacturers such as General Motors, Volvo Cars, and Porsche have adjusted or lowered profit forecasts.
Executives from Ford, GM, and Stellantis welcomed the relief measures, though some expressed concerns about the tariff structure’s complexity.
Stellantis chair John Elkann emphasized ongoing collaboration with the US administration to strengthen the American auto industry and boost exports. GM’s chief executive, Mary Barra, noted the president’s efforts to level the playing field for firms like GM, facilitating further investment in the US economy. Ford indicated that Trump’s actions would help mitigate tariff impacts on automakers, suppliers, and consumers.
Earlier that day, GM withdrew its previous profit guidance and paused share buybacks, citing tariff uncertainties.
